Marketing Assignment

GCSE – 2007

Introduction

Hello, my name is Mr Rashidian and I am a marketing director for a new record shop my family is planning in Southgate. I am aiming for the success of this new business and will hopefully reach my target, because my family and I are aware of the risks we are taking as entrepreneurs. I am a young man who has just finished his A-levels and I always take my work and responsibilities seriously.

This report shall ensure the success of the record shop for a long period of time. I will produce a marketing strategy to guarantee this plan being a success. It must meet the shop’s short-term objectives as well as helping it after the initial stages.

The benefits of running your own shop are that you are self-employed i.e. ‘you are your own boss’. You have your own opening hours and no one to order you around except the family in my case of course. However, there is a great risk of the project failing.

On the one hand approx. 50% of all businesses in the UK don’t survive even the first two years. I have seen a café for example called Jacob’s Coffee Shop in Enfield Middlesex where I hardly saw a customer, because the prices were too high. The business hoped that customers would prefer a good service rather than a cheap price, which they have offered. This event happened almost six months ago. Now when I go there, I can see a notice saying that the building is to be sent.

It is clear that this business was a big failure, because it was not familiar with its market. It did not survive even the first six months.

On the other hand being your own boss means being the only one who has to pay the bills after the business fails due to your unlimited liability as a sole trader. Furthermore I am not in control of the external environment. If nobody buys the goods from our business, we are the people who will have to take the consequences. So I will have to do my job very well. But I can rely on the government. The UK is said to have an ‘enterprise culture’. That means that the government has many offers to help entrepreneurs like me. E.g. I found in the school book that the government has the Loan Guarantee Scheme. This scheme encourages banks to make loans to business projects like ours, as the government offers to repay 80% of a loan should the entrepreneur be bankrupt and the business unable to pay.

A disadvantage, however, would be that a self-employed person has to work about 22 hours more than a normal employee.

Should the business be a success though, the amount of effort the entrepreneur will have to put in decreases.

Another advantage is the small capital that is needed, because the business is small-scale. But this small-scale nature makes it difficult to expand.

The decision making is also quick and very flexible resulting from the small nature of the sole trader.

A very important reason why many entrepreneurs choose to be a sole trader is the business being easy to establish; however it is very difficult to continue if the owner dies or retires.

A sole trader is as the name suggests not sharing profits, which can be a great benefit. But because the owner rarely shares the running of the business, responsibilities cannot be easily shared, so that the owner can be under enormous pressure when making decisions. This can also lead to less or no division of labour.

Our business will be a partnership as it omits many of the drawbacks of the sole trader.

The higher number of owners in a partnership also makes the business more capable of expansion what is an intended objective of our business, when it is successful.

There are a number of objectives my family has to accomplish before thinking of expansion though. Business’ aims are usually stated and\or attempted aims of a firm that lead the business to success. These aims should be measurable as such aims can represent the performance of a firm very clearly. The other type of aims is the one that is not able to be measured. These are also handy, but not easy to analyse, so a business might not know when it has achieved them. The directors of a business set themselves objectives, achieve them, and set themselves further objectives. This is called satisficing. Objectives are the short-term aims a business has to achieve to fulfil its aims. For example: If I aim to achieve an A* in a particular subject, my objectives may be doing my homework regularly, producing a good piece of coursework and paying attention to the teacher in class. Our aim is to maintain a healthy and successful business. To achieve that, our objectives would be at first to maintain a steady income of money, as this is the foundation of the business’ survival. As a short term direction it guarantees the existence of land, labour and capital of the business. It ensures that the business will stay healthy. A long term target would be as above mentioned the expansion of the land. It is likely to provide us with more profit, but it has also some disadvantages, as a bigger land will be harder to manage and more vulnerable to take-overs. Because the more employees a factory has, the more they are able to exert pressure by calling a strike that may lead to deliberate inefficiency of the labour in form of industrial actions. Fortunately, we are far from such worries as a small business.

Another very important objective of our business will be to maintain a personal touch with all stakeholders. In particular, the business has to develop a good relationship with customers. This will hopefully produce repeat customers which raise the business’ revenue.

These major objectives will hopefully ensure the success of this new business.

Background of this new business

The new business I am writing this report on will be called ‘Rock ‘n Records’. I have chosen this name, because it reminds of the big music category Rock ‘n Roll.

Besides, it is a name that is easy to remember and this is actually a huge advantage for any business.

The record shop must be familiar to many people and the name of it plays a very important role. Because of that I started a survey on the name of the business. I could not decide between several names. Since teenagers were the most important group that buy music, I decided to carry out the survey on 16 people in my class. Three names were able to be selected. The results were:

The result of this survey is the main reason why I chose ‘Rock ‘n Records’ and not any other name.

Another important factor of how well the business performs is the goods and services it supplies people with. As long as we have the right products available for the right price at the right time and place, we will be able to survive. So therefore the business will sell a broad range of music in order to research into the types of products that are mainly bought. Most music articles will not be records, but CDs or DVDs, because records are outdated. Only about 5% of the goods of the shop will be records. Our music range will focus on Hip-Hop, since it is the main music category teenagers listen to. Somebody in the record shop will also permanently check the Top 50 of the UK charts and buy singles as well as albums from these artists to sell them in the record shop. The business will also sell some products like pendants for keys that look like famous artists such as 50cent, Akon and James Blunt or clothes with famous stars and their labels on it such as G-Unit, Konvict music or shady records.

Another important topic about the business is the logo. I created a flyer that suits young people who are the main customers of the business. I think it will also attract DJs who are the main buyers of records, because it shows an individual that is likely to go to music festivals and is generally interested in music. DJs see this kind of person on many of their working days. The poster is on the next page.

Location of the new record shop

To find the location on the map I will have to use ‘www.yell.com’. I searched for all music shops in and around Southgate to find a location that is far from competitors, so people around our record shop will rather come to this one than go to a distant music shop:

These are other record and music shops.

Our business should be far from them.

Our record shop will be here. It is far from competition and

next to an underground station as this will attract customers.

Besides, it is near a park and residential area. There is a

permanent circulation of pedestrians which will look at the notice that is on the window of our record shop. This will attract many customers to visit the record shop.

Our exact place in Southgate is here.

The address is

3 High Street (A1004)

Southgate

N14 London

Our Human Resources and Ownership

For the time being our labour will consist only of our family. We plan a division of our labour.

My father will be the finance director, because he has worked for a bank for years and successfully managed money there. My sister will be the cashier. She is young, friendly and has a good sense of style. She is good at dealing with customers, especially teenagers. I will be the marketing director as mentioned early in this report. Since I finished my A-levels in Business studies, it is the right position for me. My mother will take care of the music articles. She was a housewife for a long time and knows how to keep things clean and tidy.

Overall our labour is one of the best, because every single worker is a partner and works for his\her own benefit in this business. Thus everyone will be highly motivated. Maslow’s theory is from my point of view the most appropriate one in terms of motivational theories. According to Maslow our family has already four certain things that worker wants i.e. we have enough money to survive and to feel secure. We are a family so we are in present of each other and we share feelings. As owners of their own business we are also likely to earn a good reputation and maybe even be admired by people whose boss is ordering them around. So the last objective will be self-actualisation. In other words, this is the success of our new project. To achieve this, everybody will hopefully do their best and once this business was a success my family will set further targets for themselves, e.g. the successful expansion of our business. So it is not likely that we, as the labour, which is maybe the most important factor in a business, will lose motivation at any point of the lifetime of our business project.

The ownership format of the business will be a partnership, for the reason that my family is fully involved in this project and everybody shall own the same part of ownership. I decided against a limited company, because it needs a secretary that keeps records of the shop and is more complicated to sustain. The business is unable to afford these things in its initial stages. Besides, there are legal formalities which must be carried out before starting the business.

Although, a limited company would mean that the business has limited liability, my decision is clear.

As a partnership my family and I are also more likely to get a loan from a bank rather than a family member being a sole trader to employ his\her family. Another advantage of this ownership format is that its affairs can be kept private except the information that has to be provided for local tax authorities. A limited company though has to produce accountants, which are available to the public.

A franchise would not be right, either, because my family and I would feel more like managers that manage the successful idea of the franchiser and making profit with it, rather than being the flexible director of an own idea. Another drawback of a franchise is that you cannot start the business until you have found a franchiser.

Before we start the business we will create a deed of partnership which outlines the division of labour, the shares, the aims etc. this is another advantage of a partnership, as a deed of partnership avoids problems with arguments that our family might have.

However, a big drawback of a usual partnership is that every partner can make decisions without consulting other partners. This can lead to problems occurring in the business. Although a wrong decision might be attributable to only one partner, all partners are unlimited liable to the remaining debts of this business. All partners of our business are family members though. As a result no partner should make decisions without the agreement of other partners. So we have a partnership omitting this big drawback. This is the main reason why the ownership format of our record shop will be a partnership.

Management Structure of our Business

It is essential for every well-performing business to have a good management structure. Therefore somebody will take the job of the personnel director and I think that I would be the right one for this job, although I am already marketing director. I am able to do this for the reason that I will have a narrow span of control and thus not many people to delegate. I will not get a high salary or perks. My only intentions are to maximise labour efficiency and maintain a good internal communication, which actually is an advantage for me, since I am an owner of this business.

To ensure this, I will use the ‘carrot and stick’ approach. Because we are a family I will not be able to make workers redundant or threat them with these intentions. However, I will still be able to make comments on how well a person performs and advise him\her on how to do things better. I will also check if there is a good horizontal link between every director.

Now I will explain how I will structure our business. Although it looks like that every important marketing decision is made by me, our organisation is not really centralized. I have thought about another system than centralised or decentralised structures. It is a centralized structure that focuses on every partner, but not in every decision. It depends on the expertise of a partner. The structure focuses always on the one who has the most experience in that particular area. In marketing decisions for example the whole structure is centralised on me. I can change everyone’s decision that is linked up with the business’ market. But the one whose choice was changed by me has still the right to understand why it happened. If I do something like that I have to explain why. This will prevent inflexibility and low motivation as someone whose opinion was changed without understanding why may become self-conscious in that area, although his\her expertise may be alright for decision making when I am not possible to make the decision.

My father has the same right of changing everybody’s decision that is linked up with financial decisions, but still owes the one whose decision was changed an explanation. So does my mother and my sister. But this right cannot be exercised on decisions resulting from a consultation exercise.

My management type will be a democratic management structure as this kind of management is highly motivating. So we will have a meeting from time to time in which we deal with strategic and significant decisions. To avoid undermining the authority of somebody who has more expertise than other partners, I have a special marking scheme. Everyone will receive a mark from 1 to 3 in areas such as product, money, cleaning and hygiene, marketing etc. This mark will represent everyone’s vote in this particular area when making a decision. I will give everyone the same amount of added up marks to avoid resentment leading to less motivation. Furthermore I will investigate a person’s skills and change his\her mark if necessary.

If the vote in a meeting showed that only one person whose expertise is great in a particular subject with 3 marks votes against all other family members whose votes all add up to 3 and the election shows no result, than it will be restarted, so nobody can outvote everybody else alone and has to give arguments for his\her decisions. This will be highly motivating and this is a great benefit for the business, since every owner can learn about other areas. As a manager I have also the responsibility of managing change, since changes will always happen in business. Therefore I will carry out market research on a regular basis in order to know when to change something in the business structure. I will also aim to set good communication between the decisions my family makes and try to persuade someone into changing his\her decision when it got in conflict with the decision of somebody else. I will keep a careful eye on no arguments happening between partners and that informal communication is always kept clear. I will take care of all of these aspects to maximise the efficiency of our business in order to maintain a good internal communication. I can imagine that we are able to become a large business when I take into account that the extremely large Virgin Corporation started as a small record shop just like ours.

The process of Marketing

From my point of view marketing is the process of identifying what the majority of consumers want and supplying them with the right goods at the right price and at the right place and time. It must ensure that the business is able to sell enough products to survive for a certain amount of time.

But this view can be different from other ones. Therefore I have listed some other definitions of the term marketing together with their sources:

Marketing is the process of identifying the consumers' wants and needs and making the product to satisfy these. The term includes advertising, distribution and selling of a product or service. It is also concerned with anticipating the customers' future needs and wants, often through market research. (www.wikipedia.com)

Marketing is identifying and anticipating customers needs and wants. (Kotler)

Marketing is the management process, which identifies, anticipates and supplies customer requirements efficiently and profitably. (www.makealias.com)

Simply stated, marketing is everything you do to place your product or service in the hands of potential customers. (www.tenonline.org)

Market orientation is researching into customers’ wants and needs. It is often done through market research. For example a market oriented record shop would not sell mainly records, since they are outdated. Today there is an advance in technology that makes it possible to listen to music via CD-players. CDs are easier to carry and listen to on the way rather than records. A market oriented business has to manage change with time and adapt to customers’ wants and needs. To remain successful over time all businesses should be market oriented. Market orientation also considers the market share of the business. It will be bigger when there are not many competitors. So a market oriented business will try to stay away from competitors.

Product orientation is relying on a product to sell itself. So market research will be minimal or not carried out at all. It considers almost nothing of the things that are mentioned under the topic market orientation.

Market orientation is far more effective than product orientation, because it focuses on customers.

Why is Market Segmentation important?

The simplest way to define a market is to think of it as consisting of all the people or organisations that may have an interest in purchasing a business’ product or service. In other words, a market includes all customers who have needs that may be satisfied by an organisation’s products. We can measure market size by measuring the number or value of units sold to a market in a given period (usually a year).

Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product needs.

The purpose is to design a product that matches the needs of individuals in a selected market segment. A market segment consists of groups with characteristics that cause them to have similar product needs. If the market would be the cake in the picture below a slice would be a market segment. Each slice has different product needs in form of the service of eating the cake, i.e. one piece wants to be eaten by hand, while for eating the other slice you have to use a folk. Most business specialize on one market segment (piece of the cake) in order to adapt their products for the special needs of the slice of the cake.

Unless a business is a restaurant it would not show its market segmentation strategies as a cake but a diagram. Suggest that a school’s cafeteria is planning to introduce a new meal to its food collection. Before the cafeteria will start selling its product, it will divide the market available into segments to choose which group will bring the most sales. A diagram that represents the various market segments could ...

Marketing Assignment

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